Generally Accepted Auditing Standards
Generally Accepted Auditing Standards
Complete problem below and submit to your instructor. Write under the generally accepted auditing standards column the specific standard that was violated and how the action of Jones resulted in a failure to comply with each standard. Organize your answer as shown below; specifically with a column for the standard that was violated and a column for the required action. The paper should be 2-3 pages.
Problem:
John Clinton, owner of Clinton Company, applied for a bank loan
and was informed by the banker that audited financial statements of the
business had to be submitted before the bank could consider the loan
application. Clinton then retained Arthur Jones, CPA, to perform an audit.
Clinton informed Jones that audited financial statements were required by the
bank and that the audit must be completed within three weeks. Clinton also
promised to pay Jones a fixed fee plus a bonus if the bank approved the loan.
Jones agreed and accepted the engagement.
The first step taken by Jones was to hire two accounting students to conduct
the audit. He spent several hours telling them exactly what to do. Jones told
the students not to spend time reviewing controls but instead to concentrate on
proving the mathematical accuracy of the ledger accounts and summarizing the data
in the accounting records that support Clinton Company’s financial statements.
The students followed Jone’s instructions and after two weeks gave Jones the
financial statements, which did not include any notes. Jones reviewed the
statements and prepared an unqualified audit report. The report, however, did
not refer to generally accepted accounting principles.
Required:
List on the left side of a sheet of paper the generally accepted auditing standards that were violated by Jones, and indicate how the actions of Jones resulted in a failure to comply with each standard. Organize your answers as follows:
|
Generally Accepted Auditing Standards | Actions by Jones Resulting in Failure to Comply with Generally Accepted Auditing Standards |
| General Standards | |
| (1) The auditor must have adequate technical training and proficiency to perform the audit. | (1) |
Carefully review the Grading Rubric (Links to an external site.)Links to an external site. for the criteria that will be used to evaluate your assignment.
Description:
Total Possible Score: 8.00
Identify Generally Accepted Auditing Standards
Total: 0.50
Distinguished – Identifies nine to ten of the Generally Accepted Auditing Standards violated in the scenario.
Proficient – Identifies seven to eight of the Generally Accepted Auditing Standards violated in the scenario.
Basic – Identifies five to six of the Generally Accepted Auditing Standards violated in the scenario.
Below Expectations – Identifies less than five of the Generally Accepted Auditing Standards violated in the scenario.
Non-Performance – Identification of Generally Accepted Auditing Standards violated in the scenario is either nonexistent or lacks components described in the assignment instructions.
Failure to Comply
Total: 5.00
Distinguished – Thoroughly and comprehensively describes actions resulting in failure to comply with Generally Accepted Auditing Standards.
Proficient – Describes in detail the actions resulting in failure to comply with Generally Accepted Auditing Standards.
Basic – Briefly describes actions resulting in failure to comply with Generally Accepted Auditing Standards.
Below Expectations – Fails to describe actions resulting in failure to comply with Generally Accepted Auditing Standards.
Non-Performance – A description of actions resulting in failure to comply with Generally Accepted Auditing Standards is either nonexistent or lacks components described in the assignment instructions.
Integrative Learning: Connections to Discipline
Total: 1.00
Distinguished – Autonomously synthesizes or draws conclusions by combining examples, facts, or theories from multiple disciplines.
Proficient – Autonomously correlates examples, facts, or theories from multiple disciplines.
Basic – Attempts to correlate examples, facts, or theories from multiple disciplines.
Below Expectations – Student, when prompted, displays inconsistent examples, facts, or theories from multiple disciplines.
Non-Performance – The assignment is either nonexistent or lacks the components described in the instructions.
Applied Ethics: Ethical Issue Recognition
Total: 1.00
Distinguished – States ethical issues when presented in a complex, ambiguous context AND can recognize interrelationships among the various issues.
Proficient – States ethical issues when they are presented in an ambiguous context OR can grasp cross-relationships among the issues.
Basic – States basic and apparent ethical issues and understands (incompletely) the complexities or interrelationships among the issues.
Below Expectations – States apparent ethical issues but fails to grasp complexity or interrelationships.
Non-Performance – The assignment is either nonexistent or lacks the components described in the instructions.
Written Communication: Control of Syntax and Mechanics
Total: 0.50
Distinguished – Displays meticulous comprehension and organization of syntax and mechanics, such as spelling and grammar. Written work contains no errors, and is very easy to understand.
Proficient – Displays comprehension and organization of syntax and mechanics, such as spelling and grammar. Written work contains only a few minor errors, and is mostly easy to understand.
Basic – Displays basic comprehension of syntax and mechanics, such as spelling and grammar. Written work contains a few errors, which may slightly distract the reader.
Below Expectations – Fails to display basic comprehension of syntax or mechanics, such as spelling and grammar. Written work contains major errors, which distract the reader.
Non-Performance – The assignment is either nonexistent or lacks the components described in the instructions.
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